KKR & Co. Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - KKR & Co. Inc.	q2178-kearningsreleasewrap.htm

KKR & Co. L.P. Reports Second Quarter 2017 Results

_________________________________________________________________________________________________________________________________________________________________________

NEW YORK, July 27, 2017 - KKR & Co. L.P. (NYSE: KKR) today reported its second quarter 2017 results.

GAAP net income (loss) attributable to KKR & Co. L.P. common unitholders was $405.6 million and $665.0 million for the quarter and six months ended June 30, 2017, respectively. On a diluted basis, net income (loss) per common unit was $0.81 and $1.33 for the quarter and six months ended June 30, 2017, respectively. Investment performance primarily drove GAAP net income (loss) attributable to KKR & Co. L.P. common unitholders. GAAP KKR & Co. L.P. Capital - Common Unitholders equity was $6.2 billion ⁽¹⁾ as of June 30, 2017, or $13.22, per outstanding common unit.

After-tax Economic Net Income (Loss) and After-tax Economic Net Income (Loss) per adjusted unit were $752.5 million and $0.89, respectively, for the quarter ended June 30, 2017. After-tax Distributable Earnings and After-tax Distributable Earnings per adjusted unit eligible for distribution were $321.9 million and $0.39, respectively, for the quarter ended June 30, 2017.

After-tax Economic Net Income (Loss) and After-tax Economic Net Income (Loss) per adjusted unit were $1,302.5 million and $1.54, respectively, for the six months ended June 30, 2017. After-tax Distributable Earnings and After-tax Distributable Earnings per adjusted unit eligible for distribution were $668.4 million and $0.82, respectively, for the six months ended June 30, 2017.

Highlights


•	Strong investment performance primarily drove After-tax Economic Net Income of $752.5 million, or $0.89 per adjusted unit, for the second quarter of 2017


•	Book value was $11.0 billion as of June 30, 2017 or $13.50 per outstanding adjusted unit


•	As of June 30, 2017, Assets Under Management and Fee Paying Assets Under Management were $148 billion and $113 billion respectively, up 13% and 19%, respectively, compared to June 30, 2016


•	In the quarter, a final close was held on KKR Asian Fund III, bringing total commitments to our flagship private equity fund in the Asia-Pacific region to $9.3 billion, including employee commitments


•	KKR's regular distribution per common unit of $0.17 was declared for the quarter ended June 30, 2017

___________________________

“Investment performance resulted in record after-tax Economic Net Income for KKR this quarter. Operating fundamentals across the firm remain strong evidenced by the growth in our Fee Paying Assets Under Management and Book Value,” said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. “Additionally, we were pleased to announce last week the appointment of Joe Bae and Scott Nuttall as Co-Presidents and Co-Chief Operating Officers of KKR. Each brings with them a proven track record of value creation and business building that will help lead the Firm in the next stage of its development and growth.”

Note: Certain financial measures, including economic net income ("ENI"), After-tax ENI, After-tax distributable earnings, book value, adjusted units and outstanding adjusted units, are not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See Exhibits C and D for a reconciliation of such measures to financial results prepared in accordance with GAAP.

⁽¹⁾ GAAP KKR & Co. L.P. Capital - Common Unitholders equity represents only that portion of the business held by KKR & Co. L.P. and does not include the economic interests that are held by KKR Holdings L.P. Our reportable segments are presented prior to giving effect to the allocation of ownership interests between KKR & Co. L.P. and KKR Holdings L.P. and as such represent the business in total.

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GAAP RESULTS COMMENTARY

Fees and Other

Fees and Other for the quarter and six months ended June 30, 2017 were $931.8 million and $1,647.7 million, respectively compared to $576.8 million and $739.6 million for the comparable periods of 2016. The net increases were primarily due to higher levels of carried interest gains in the current periods as well as higher transaction fees primarily in our Capital Markets and Private Markets businesses.

Expenses

Total expenses were $629.7 million and $1,169.7 million for the quarter and six months ended June 30, 2017 compared to $423.2 million and $731.5 million for the quarter and six months ended June 30, 2016. The increases were primarily due to a higher level of performance income compensation reflecting appreciation in the value of our private equity and credit portfolios in the 2017 periods as well as increased cash compensation and benefits in connection with a higher level of fees.

Total Investment Income (Loss)

Total investment income (loss) was $585.0 million and $1,247.5 million for the quarter and six months ended June 30, 2017, compared to $125.7 million and $(487.2) million for the quarter and six months ended June 30, 2016. The investment gains in the current period were primarily due to an increase in the value of KKR's private equity and credit portfolios.

Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders

Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders was $405.6 million and $665.0 million for the quarter and six months ended June 30, 2017, compared to $93.9 million and $(236.0) million for the quarter and six months ended June 30, 2016. The increase was primarily due to the drivers of investment income and carried interest gains partially offset by higher expenses, as described above.

TOTAL REPORTABLE SEGMENTS RESULTS COMMENTARY

Segment Revenues

Total segment revenues for the quarter and six months ended June 30, 2017 were $1,265.1 million and $2,287.8 million, respectively, compared to total segment revenues of $544.0 million and $169.4 million in the comparable periods of 2016. These increases were primarily driven by increases in fees, performance income and total investment income. The increase in fees was driven primarily by an increase in transaction fees in our Capital Markets and Private Markets segments and an increase in management fees in our Private Markets and Public Markets segments. The increases in performance income and total investment income was driven largely by higher appreciation in KKR's private equity and certain of our alternative credit portfolios. For the quarter and six months ended June 30, 2017, KKR's private equity portfolio appreciated 7.3% and 11.7% respectively.

Economic Net Income

ENI was $830.3 million and $1,498.8 million for the quarter and six months ended June 30, 2017 compared to ENI of $248.8 million and $(258.1) million for the quarter and six months ended June 30, 2016. These increases were primarily attributable to higher total segment revenues as described above, partially offset by higher total compensation and benefits reflecting a higher level of fees and carried interest generated in the 2017 periods.

AUM and FPAUM

AUM was $148.5 billion as of June 30, 2017, an increase of $10.9 billion, compared to AUM of $137.6 billion as of March 31, 2017. These increases were driven by new capital raised and an increase in value in our private equity and alternative credit businesses as well as an increase reflecting the impact of the PAAMCO Prisma transaction. These increases were partially offset by distributions to limited partners of our private equity funds arising from realizations and distributions made in our Public Markets segment.

FPAUMwas $112.6 billion as of June 30, 2017, an increase of $5.5 billion, compared to FPAUM of $107.1 billion as of March 31, 2017. The increase was primarily attributable to new capital raised in our Private Markets and Public Markets segments. These increases were partially offset by distributions in our Public Markets segment, the PAAMCO Prisma transaction, and distributions to limited partners of our private equity funds arising from realizations.

DISTRIBUTIONS AND OTHER

A distribution of $0.17 per common unit has been declared, which will be paid on August 22, 2017 to holders of record of common units as of the close of business on August 7, 2017. Under KKR's current distribution policy, KKR intends to make equal quarterly distributions of $0.17 per unit to holders of its common units.

A distribution of $0.421875 per Series A Preferred Unit has been declared and set aside for payment on September 15, 2017 to holders of record of Series A Preferred Units as of the close of business on September 1, 2017. A distribution of $0.406250 per Series B Preferred Unit has been declared and set aside for payment on September 15, 2017 to holders of record of Series B Preferred Units as of the close of business on September 1, 2017.

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The declaration and payment of any future distributions on preferred or common units are subject to the discretion of the board of directors of the general partner of KKR & Co. L.P. and the terms of its limited partnership agreement. There can be no assurance that future distributions will be made as intended or at all, that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR or that any particular distribution policy for common units will be maintained.

Since October 27, 2015, KKR has authorized a total of $750 million to repurchase its common units, of which $459 million has been spent to repurchase 31.7 million common units as of July 24, 2017. On April 3, 2017, KKR canceled equity awards representing 1.9 million common units to satisfy tax obligations of $35 million in connection with their vesting, bringing cumulative cancellations of equity awards representing 7.1 million common units to satisfy tax obligations of $114 million. In total, 38.8 million common units have been retired on a fully-diluted basis over this period. Common units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise.

On April 24, 2017, KFN redeemed $115 million par amount of its 7.500% Senior Notes due 2042 (the “7.500% Notes”) for cash, at a redemption price equal to 100% of the principal amount of the 7.500% Notes plus unpaid and accrued interest.

On June 29, 2017, KKR Capital Markets entered into a 364-day revolving credit agreement (the “Agreement”) with a major financial institution for use in KKR's capital markets business. The Agreement provides for revolving borrowings of up to $750 million, expires on June 28, 2018, and ranks pari passu with the existing $500 million credit facility provided by them for KKR's capital markets business. Borrowings under the Agreement may only be used to facilitate the settlement of debt transactions syndicated by KKR’s capital markets business. Obligations under the Agreement are limited to the entities involved in KKR’s capital markets business, and liabilities under the Agreement are non-recourse to other parts of KKR.

Beginning with the quarter ending September 30, 2017, 43% of carried interest generated by certain recent and future funds will be allocated to the carry pool instead of 40% of carried interest. The incremental 3% replaces the amount of certain management fee refunds that would have been calculated for those funds as performance income compensation. Had this change been applied during the trailing twelve months ended June 30, 2017, there would have been no material change to the total performance fee compensation reportable for such period.

CONFERENCE CALL

A conference call to discuss KKR's financial results will be held on Thursday, July 27, 2017 at 10:00 a.m. ET. The conference call may be accessed by dialing (877) 303-2917 (U.S. callers) or +1 (253) 237-1135 (non-U.S. callers); a pass code is not required. Additionally, the conference call will be broadcast live over the Internet and may be accessed through the Investor Center section of KKR's website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. A replay of the live broadcast will be available on KKR's website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 52448834, beginning approximately two hours after the broadcast.

A slide presentation containing supplemental commentary about KKR's financial results for the fiscal quarter ended June 30, 2017 may be accessed through the Investor Center of the KKR website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. The presentation will be referenced on the conference call discussed above.

From time to time, KKR may use its website as a channel of distribution of material company information. Financial and other important information regarding KKR is routinely posted and accessible on the Investor Center for KKR & Co. L.P. at http://ir.kkr.com/kkr_ir/kkr_events.cfm. In addition, you may automatically receive email alerts and other information about KKR by enrolling your email address at the “Email Alerts” area of the Investor Center on the website.

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ABOUT KKR

KKR is a leading global investment firm that manages multiple alternative asset classes including private equity, energy, infrastructure, real estate, credit and, through its strategic partners, hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR's portfolio companies. KKR invests its own capital alongside its partners' capital and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE: KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, including the statements with respect to the declaration and payment of distributions in future quarters and the timing, manner and volume of repurchase of common units pursuant to its repurchase program. The forward-looking statements are based on KKR’s beliefs, assumptions and expectations, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR’s business, financial condition, liquidity and results of operations, including but not limited to AUM, FPAUM, ENI, after-tax ENI, after-tax distributable earnings, capital invested, syndicated capital, uncalled commitments, cash and short-term investments, fee related earnings, fee and yield segment EBITDA, core interest expense and book value, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the volatility of the capital markets; failure to realize the benefits of or changes in KKR’s business strategies including the ability to realize the anticipated synergies from acquisitions, strategic partnerships or other transactions; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKR’s competition. All forward looking statements speak only as of the date hereof. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKR’s business strategy is focused on the long term and financial results are subject to significant volatility. Additional information about factors affecting KKR is available in KKR & Co. L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on February 24, 2017, quarterly reports on Form 10-Q for subsequent quarters and other filings with the SEC, which are available at www.sec.gov.

___________________________

CONTACT INFORMATION

Investor Relations:

Kohlberg Kravis Roberts & Co. L.P.

Craig Larson

Tel: +1-877-610-4910 (U.S.) / +1-212-230-9410

investor-relations@kkr.com

Media:

Kohlberg Kravis Roberts & Co. L.P.

Kristi Huller

Tel: +1-212-750-8300

media@kkr.com

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KKR
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS - UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)




	Quarter Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Revenues
Fees and Other	$	931,788		$	576,757		$	1,647,740		$	739,562
Expenses
Compensation and Benefits	462,841			296,412			865,804			421,901
Occupancy and Related Charges	14,032			16,188			28,883			32,754
General, Administrative and Other	152,855			110,618			275,055			276,886
Total Expenses	629,728			423,218			1,169,742			731,541
Investment Income (Loss)
Net Gains (Losses) from Investment Activities	418,428			9,168			976,876			(726,055		)
Dividend Income	69,446			31,669			79,370			94,882
Interest Income	295,718			266,213			576,698			496,689
Interest Expense	(198,590		)	(181,313		)	(385,444		)	(352,707		)
Total Investment Income (Loss)	585,002			125,737			1,247,500			(487,191		)

Income (Loss) Before Taxes	887,062			279,276			1,725,498			(479,170		)

Income Tax (Benefit)	18,538			6,045			59,080			7,935

Net Income (Loss)	868,524			273,231			1,666,418			(487,105		)

Net Income (Loss) Attributable to
Redeemable Noncontrolling Interests	22,387			1,533			43,320			1,495
Net Income (Loss) Attributable to
Noncontrolling Interests	432,150			172,115			941,427			(258,244		)

Net Income (Loss) Attributable to KKR & Co. L.P.	413,987			99,583			681,671			(230,356		)

Net Income (Loss) Attributable to Series A Preferred Unitholders	5,822			5,693			11,644			5,693
Net Income (Loss) Attributable to Series B Preferred Unitholders	2,519			—			5,038			—

Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders	$	405,646		$	93,890		$	664,989		$	(236,049	)

Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit
Basic	$	0.87		$	0.21		$	1.45		$	(0.53	)
Diluted ⁽¹⁾	$	0.81		$	0.19		$	1.33		$	(0.53	)
Weighted Average Common Units Outstanding
Basic	466,170,025			448,221,538			459,967,395			449,241,840
Diluted ⁽¹⁾	501,177,423			481,809,612			498,943,294			449,241,840

⁽¹⁾ KKR Holdings L.P. units have been excluded from the calculation of diluted earnings per common unit since the exchange of these units would not dilute KKR’s respective ownership interests in the KKR Group Partnerships. For the six months ended June 30, 2016, unvested common units and other securities are excluded from the calculation of diluted earnings per common unit because inclusion of such unvested common units and other securities would be anti-dilutive having the effect of decreasing the loss per common unit.

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KKR
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (GAAP BASIS - UNAUDITED)
(Amounts in thousands, except per common unit amounts)


	As of
	June 30, 2017		December 31, 2016

Assets
Cash and Cash Equivalents	$	2,131,687	$	2,508,902
Investments	36,267,767		31,409,765
Other Assets	4,468,627		5,084,230
Total Assets	42,868,081		39,002,897

Liabilities and Equity
Debt Obligations	19,425,253		18,544,075
Other Liabilities	3,900,469		3,340,739
Total Liabilities	23,325,722		21,884,814

Redeemable Noncontrolling Interests	512,481		632,348

Equity
Series A Preferred Units	332,988		332,988
Series B Preferred Units	149,566		149,566
KKR & Co. L.P. Capital - Common Unitholders	6,212,556		5,457,279
Noncontrolling Interests	12,334,768		10,545,902
Total Equity	19,029,878		16,485,735
Total Liabilities and Equity	$	42,868,081	$	39,002,897

KKR & Co. L.P. Capital Per Outstanding Common Unit - Basic	$	13.22	$	12.06

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KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)


	Quarter Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees	$	229,569		$	208,284		$	203,617		$	437,853		$	398,217
Monitoring Fees	30,510			13,220			28,998			43,730			41,035
Transaction Fees	156,465			243,035			68,564			399,500			164,649
Fee Credits	(51,384		)	(89,017		)	(39,073		)	(140,401		)	(61,880		)
Total Management, Monitoring and Transaction Fees, Net	365,160			375,522			262,106			740,682			542,021
Performance Income (Loss)
Realized Incentive Fees	2,624			1,686			4,645			4,310			6,238
Realized Carried Interest	264,668			206,204			305,275			470,872			402,563
Unrealized Carried Interest	296,719			140,626			18,698			437,345			(205,107		)
Total Performance Income (Loss)	564,011			348,516			328,618			912,527			203,694
Investment Income (Loss)
Net Realized Gains (Losses)	7,180			79,451			224,699			86,631			200,516
Net Unrealized Gains (Losses)	307,977			204,036			(297,448		)	512,013			(862,439		)
Total Realized and Unrealized	315,157			283,487			(72,749		)	598,644			(661,923		)
Interest Income and Dividends	67,836			56,882			74,451			124,718			182,571
Interest Expense	(47,026		)	(41,709		)	(48,447		)	(88,735		)	(96,991		)
Net Interest and Dividends	20,810			15,173			26,004			35,983			85,580
Total Investment Income (Loss)	335,967			298,660			(46,745		)	634,627			(576,343		)
Total Segment Revenues	1,265,138			1,022,698			543,979			2,287,836			169,372
Segment Expenses
Compensation and Benefits
Cash Compensation and Benefits	135,522			139,435			96,890			274,957			197,789
Realized Performance Income Compensation	111,917			88,067			123,968			199,984			163,520
Unrealized Performance Income Compensation	119,774			57,214			8,525			176,988			(78,117		)
Total Compensation and Benefits	367,213			284,716			229,383			651,929			283,192
Occupancy and Related Charges	13,407			14,369			15,659			27,776			31,609
Other Operating Expenses	53,069			53,498			49,533			106,567			111,419
Total Segment Expenses	433,689			352,583			294,575			786,272			426,220
Income (Loss) attributable to noncontrolling interests	1,180			1,584			575			2,764			1,242
Economic Net Income (Loss)	830,269			668,531			248,829			1,498,800			(258,090		)
Equity-based Compensation	44,976			49,943			48,026			94,919			97,987
Pre-tax Economic Net Income (Loss)	785,293			618,588			200,803			1,403,881			(356,077		)
Provision for Income Tax (Benefit)	24,408			60,325			3,898			84,733			6
Preferred Distributions	8,341			8,341			5,693			16,682			5,693
After-tax Economic Net Income (Loss)	$	752,544		$	549,922		$	191,212		$	1,302,466		$	(361,776	)

After-tax Economic Net Income (Loss) Per Adjusted Unit	$	0.89		$	0.65		$	0.23		$	1.54		$	(0.43	)
Weighted Average Adjusted Units (Fully Diluted Basis)	847,650,747			849,270,924			840,537,946			848,456,360			844,254,980

Other Operating Measures:
Fee Related Earnings ⁽¹⁾	$	214,357		$	221,989		$	137,761		$	436,346		$	278,759
After-tax Distributable Earnings ⁽²⁾	$	321,922		$	346,467		$	507,592		$	668,389		$	676,324

Assets Under Management	$	148,483,000		$	137,616,300		$	130,990,500		$	148,483,000		$	130,990,500
Fee Paying Assets Under Management	$	112,646,200		$	107,131,100		$	94,608,100		$	112,646,200		$	94,608,100
Capital Invested and Syndicated Capital	$	5,369,400		$	6,559,100		$	2,178,400		$	11,928,500		$	5,346,200
Uncalled Commitments	$	42,551,600		$	41,222,800		$	38,366,900		$	42,551,600		$	38,366,900

Note: See "Notes to Reportable Segments" for more information about certain non-GAAP financial measures and Exhibits C and D for a reconciliation of such measures to the financial results presented in accordance with GAAP.

⁽¹⁾ See Exhibit A "Other Financial Information" for the definition and calculation of Fee Related Earnings.

⁽²⁾ See page 8 for the calculation of After-tax Distributable Earnings

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KKR
CALCULATION OF AFTER-TAX DISTRIBUTABLE EARNINGS ⁽¹⁾
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except per unit amounts)


	Quarter Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Distributable Segment Revenues
Fees and Other, Net
Management Fees	$	229,569		$	208,284		$	203,617		$	437,853		$	398,217
Monitoring Fees	30,510			13,220			28,998			43,730			41,035
Transaction Fees	156,465			243,035			68,564			399,500			164,649
Fee Credits	(51,384		)	(89,017		)	(39,073		)	(140,401		)	(61,880		)
Total Fees and Other, Net	365,160			375,522			262,106			740,682			542,021

Realized Performance Income (Loss)
Incentive Fees	2,624			1,686			4,645			4,310			6,238
Carried Interest	264,668			206,204			305,275			470,872			402,563
Total Realized Performance Income (Loss)	267,292			207,890			309,920			475,182			408,801

Realized Investment Income (Loss)
Net Realized Gains (Losses)	7,180			79,451			224,699			86,631			200,516
Interest Income and Dividends	67,836			56,882			74,451			124,718			182,571
Interest Expense	(47,026		)	(41,709		)	(48,447		)	(88,735		)	(96,991		)
Total Realized Investment Income (Loss)	27,990			94,624			250,703			122,614			286,096
Total Distributable Segment Revenues	660,442			678,036			822,729			1,338,478			1,236,918

Distributable Segment Expenses
Compensation and Benefits
Cash Compensation and Benefits	135,522			139,435			96,890			274,957			197,789
Performance Income Compensation	111,917			88,067			123,968			199,984			163,520
Total Compensation and Benefits	247,439			227,502			220,858			474,941			361,309
Occupancy and Related Charges	13,407			14,369			15,659			27,776			31,609
Other Operating Expenses	53,069			53,498			49,533			106,567			111,419
Total Distributable Segment Expenses	313,915			295,369			286,050			609,284			504,337

Income (Loss) Attributable to Noncontrolling Interests	1,180			1,584			575			2,764			1,242
Income Taxes Paid	15,084			26,275			22,819			41,359			49,322
Preferred Distributions	8,341			8,341			5,693			16,682			5,693
After-tax Distributable Earnings	$	321,922		$	346,467		$	507,592		$	668,389		$	676,324

Per Adjusted Unit Eligible for Distribution	$	0.39		$	0.43		$	0.63		$	0.82		$	0.84

⁽¹⁾ See Exhibit C for reconciliations of (i) Fees and other (GAAP basis) to Total Distributable Segment Revenues, (ii) Total Expenses (GAAP Basis) to Total Distributable Segment Expenses and (iii) Net Income (Loss) attributable to KKR & Co. L.P. common unitholders (GAAP Basis) to After-tax Distributable Earnings. See Exhibit D for a reconciliation of GAAP Common Units Outstanding to Adjusted Units Eligible for Distribution.

Page 8



KKR
SCHEDULE OF SEGMENT REVENUES AND OTHER SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Amounts in thousands)

PRIVATE MARKETS

	Quarter Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees	$	142,253		$	123,512		$	118,783		$	265,765		$	236,581
Monitoring Fees	30,510			13,220			28,998			43,730			41,035
Transaction Fees	37,252			117,882			23,400			155,134			60,798
Fee Credits	(31,750		)	(85,650		)	(33,319		)	(117,400		)	(55,915		)
Total Management, Monitoring and Transaction Fees, Net	178,265			168,964			137,862			347,229			282,499
Performance Income (Loss)
Realized Incentive Fees	—			—			—			—			—
Realized Carried Interest	264,668			206,204			305,275			470,872			398,725
Unrealized Carried Interest	279,010			123,506			9,974			402,516			(184,725		)
Total Performance Income (Loss)	543,678			329,710			315,249			873,388			214,000
Investment Income (Loss)
Net Realized Gains (Losses)	—			—			—			—			—
Net Unrealized Gains (Losses)	—			—			—			—			—
Total Realized and Unrealized	—			—			—			—			—
Interest Income and Dividends	—			—			—			—			—
Interest Expense	—			—			—			—			—
Net Interest and Dividends	—			—			—			—			—
Total Investment Income (Loss)	—			—			—			—			—
Total Segment Revenues	$	721,943		$	498,674		$	453,111		$	1,220,617		$	496,499

Assets Under Management	$	84,984,000		$	80,197,600		$	75,357,000		$	84,984,000		$	75,357,000
Fee Paying Assets Under Management	$	62,008,900		$	56,667,600		$	46,027,600		$	62,008,900		$	46,027,600
Capital Invested	$	3,623,300		$	4,484,200		$	1,020,500		$	8,107,500		$	3,104,700
Uncalled Commitments	$	35,792,900		$	35,071,700		$	31,173,300		$	35,792,900		$	31,173,300



PUBLIC MARKETS

	Quarter Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees	$	87,316		$	84,772		$	84,834		$	172,088		$	161,636
Monitoring Fees	—			—			—			—			—
Transaction Fees	25,515			4,056			5,888			29,571			7,020
Fee Credits	(19,634		)	(3,367		)	(5,754		)	(23,001		)	(5,965		)
Total Management, Monitoring and Transaction Fees, Net	93,197			85,461			84,968			178,658			162,691
Performance Income (Loss)
Realized Incentive Fees	2,624			1,686			4,645			4,310			6,238
Realized Carried Interest	—			—			—			—			3,838
Unrealized Carried Interest	17,709			17,120			8,724			34,829			(20,382		)
Total Performance Income (Loss)	20,333			18,806			13,369			39,139			(10,306		)
Investment Income (Loss)
Net Realized Gains (Losses)	—			—			—			—			—
Net Unrealized Gains (Losses)	—			—			—			—			—
Total Realized and Unrealized	—			—			—			—			—
Interest Income and Dividends	—			—			—			—			—
Interest Expense	—			—			—			—			—
Net Interest and Dividends	—			—			—			—			—
Total Investment Income (Loss)	—			—			—			—			—
Total Segment Revenues	$	113,530		$	104,267		$	98,337		$	217,797		$	152,385

Assets Under Management	$	63,499,000		$	57,418,700		$	55,633,500		$	63,499,000		$	55,633,500
Fee Paying Assets Under Management	$	50,637,300		$	50,463,500		$	48,580,500		$	50,637,300		$	48,580,500
Capital Invested	$	1,293,100		$	893,600		$	1,146,700		$	2,186,700		$	1,565,000
Uncalled Commitments	$	6,758,700		$	6,151,100		$	7,193,600		$	6,758,700		$	7,193,600

Page 9



KKR
SCHEDULE OF SEGMENT REVENUES AND OTHER SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Amounts in thousands)

CAPITAL MARKETS

	Quarter Ended						Six Months Ended
	June 30, 2017		March 31, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees	$	—	$	—	$	—	$	—	$	—
Monitoring Fees	—		—		—		—		—
Transaction Fees	93,698		121,097		39,276		214,795		96,831
Fee Credits	—		—		—		—		—
Total Management, Monitoring and Transaction Fees, Net	93,698		121,097		39,276		214,795		96,831
Performance Income (Loss)
Realized Incentive Fees	—		—		—				—
Realized Carried Interest	—		—		—				—
Unrealized Carried Interest	—		—		—				—
Total Performance Income (Loss)	—		—		—		—		—
Investment Income (Loss)
Net Realized Gains (Losses)	—		—		—		—		—
Net Unrealized Gains (Losses)	—		—		—		—		—
Total Realized and Unrealized	—		—		—		—		—
Interest Income and Dividends	—		—		—		—		—
Interest Expense	—		—		—		—		—
Net Interest and Dividends	—		—		—		—		—
Total Investment Income (Loss)	—		—		—		—		—
Total Segment Revenues	$	93,698	$	121,097	$	39,276	$	214,795	$	96,831

Syndicated Capital	$	453,000	$	1,181,300	$	11,200	$	1,634,300	$	676,500



PRINCIPAL ACTIVITIES

	Quarter Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Segment Revenues
Management, Monitoring and Transaction Fees, Net
Management Fees	$	—		$	—		$	—		$	—		$	—
Monitoring Fees	—			—			—			—			—
Transaction Fees	—			—			—			—			—
Fee Credits	—			—			—			—			—
Total Management, Monitoring and Transaction Fees, Net	—			—			—			—			—
Performance Income (Loss)
Realized Incentive Fees	—			—			—			—			—
Realized Carried Interest	—			—			—			—			—
Unrealized Carried Interest	—			—			—			—			—
Total Performance Income (Loss)	—			—			—			—			—
Investment Income (Loss)
Net Realized Gains (Losses)	7,180			79,451			224,699			86,631			200,516
Net Unrealized Gains (Losses)	307,977			204,036			(297,448		)	512,013			(862,439		)
Total Realized and Unrealized	315,157			283,487			(72,749		)	598,644			(661,923		)
Interest Income and Dividends	67,836			56,882			74,451			124,718			182,571
Interest Expense	(47,026		)	(41,709		)	(48,447		)	(88,735		)	(96,991		)
Net Interest and Dividends	20,810			15,173			26,004			35,983			85,580
Total Investment Income (Loss)	335,967			298,660			(46,745		)	634,627			(576,343		)
Total Segment Revenues	$	335,967		$	298,660		$	(46,745	)	$	634,627		$	(576,343	)

Page 10



KKR
BALANCE SHEET
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except per unit amounts)



	As of
	June 30, 2017			December 31, 2016
Cash and Short-term Investments	$	3,074,003		$	3,387,673
Investments	8,357,597		⁽¹⁾	6,958,873
Unrealized Carry	1,498,310		⁽²⁾	1,213,692		⁽²⁾
Other Assets	1,909,534			1,611,678
Corporate Real Estate	161,225			161,225
Total Assets	$	15,000,669		$	13,333,141

Debt Obligations - KKR (ex-KFN)	$	2,000,000		$	2,000,000
Debt Obligations - KFN	639,767			398,560
Preferred Shares - KFN	373,750			373,750
Other Liabilities	491,262			244,676
Total Liabilities	3,504,779			3,016,986

Noncontrolling Interests	22,397			19,564
Preferred Units	500,000			500,000

Book Value	$	10,973,493		$	9,796,591


Book Value Per Outstanding Adjusted Unit ⁽³⁾	$	13.50		$	12.15


	Last Twelve Months Ended
	June 30, 2017			December 31, 2016

Return on Equity (After-tax Economic Net Income (Loss) ) ⁽⁴⁾	23%			6%

Return on Equity (After-tax Distributable Earnings) ⁽⁵⁾	15%			16%

Note: As of June 30, 2017, KKR had a $1.0 billion revolving credit facility, which was undrawn. In addition, KKR has $1.3 billion in revolving credit facilities for use in its capital markets business, which were undrawn as of June 30, 2017. As of June 30, 2017, KKR’s portion of total uncalled commitments to its investment funds was $3.5 billion. See Exhibit B for details.

⁽¹⁾ See schedule of investments that follows on the next page.

⁽²⁾ The following table provides unrealized carry by segment:



	As of
	June 30, 2017		December 31, 2016
Private Markets	$	1,392,639	$	1,141,610
Public Markets	105,671		72,082
Total	$	1,498,310	$	1,213,692

⁽³⁾ See reconciliation in Exhibit D for calculation of Outstanding Adjusted Units.

⁽⁴⁾ Return on Equity (After-tax Economic Net Income (Loss) ) measures the amount of after-tax economic net income generated as a percentage of capital invested in KKR’s business. Return on equity is calculated by dividing After-tax Economic Net Income (Loss) on a trailing twelve-month basis by the average book value during the period. We believe this measure is useful to unitholders as it provides a measure of the overall profitability of KKR’s businesses as a percentage of net assets in KKR's business.

⁽⁵⁾ Return on Equity (After-tax Distributable Earnings) measures the amount of income excluding the impact of mark-to-market gain (losses) generated as a percentage of capital invested in KKR’s business. It is calculated by dividing after-tax distributable earnings on a trailing twelve-month basis by the average book value during the period. We believe this measure is useful to unitholders as it provides a measure of the overall profitability of KKR’s businesses, excluding the impact of mark-to-market gains (losses), as a percentage of net assets in KKR's business.

Page 11

KKR

SCHEDULE OF INVESTMENTS ⁽¹⁾

TOTAL REPORTABLE SEGMENTS (UNAUDITED)

(Amounts in thousands, except percentage amounts)



As of June 30, 2017

Investments	Carrying Value

Private Equity Co-Investments and Other Equity	$	2,796,608
Private Equity Funds	1,316,484
Private Equity Total	4,113,092

Energy	593,600
Real Estate	823,649
Infrastructure	298,348
Real Assets Total	1,715,597


Special Situations	826,465
Direct Lending	99,253
Mezzanine	27,755
Alternative Credit Total	953,473
CLOs	602,386
Liquid Credit	162,226
Specialty Finance	212,193
Credit Total	1,930,278


Other	598,630

Total Investments	$	8,357,597



	As of June 30, 2017

Significant Investments: ⁽³⁾	Carrying Value		Carrying Value as a Percentage of Total Investments
First Data Corporation	$	1,391,845	16.7	%
USI, Inc.	500,099		6.0	%
KKR Real Estate Finance Trust Inc.	325,000		3.9	%
PortAventura Entertainment S.A.	285,658		3.4	%
WMIH Corp.	207,577		2.5	%
Total Significant Investments	2,710,179		32.5	%

Other Investments	5,647,418		67.5	%
Total Investments	$	8,357,597	100.0	%

⁽¹⁾ Investments is a term used solely for purposes of financial presentation of a portion of KKR’s balance sheet and includes majority ownership of subsidiaries that operate KKR’s asset management and broker-dealer businesses, including the general partner interests of KKR’s investment funds. Investments also include our ownership of $325.0 million in KKR Real Estate Finance Trust Inc. and $265.1 million of CLOs which are not held for investment purposes and held at cost.

⁽²⁾ General partner commitments in our funds are included in the various asset classes shown above. Private Equity and Other Equity includes KKR private equity funds, co-investments alongside such KKR sponsored private equity funds, core private equity co-investments and other opportunistic investments. However, equity investments in other asset classes, such as real estate, special situations and energy appear in these other asset classes. Other Credit consists of liquid credit and specialty finance strategies.

⁽³⁾ The significant investments include the top five investments (other than investments expected to be syndicated or transferred in connection with new fundraising) based on their carrying values as of June 30, 2017. The carrying value figures include the co-investment and the limited partner and/or general partner interests held by KKR in the underlying investment, if applicable.

Page 12



KKR
ASSETS UNDER MANAGEMENT (UNAUDITED)
(Amounts in thousands)

	Private Markets Segment				Public Markets Segment				Total Reportable Segments
Quarter Ended June 30, 2017
March 31, 2017	$	80,197,600			$	57,418,700			$	137,616,300
New Capital Raised	4,789,400				1,967,500				6,756,900
Impact of Other Transactions	—				3,811,400			⁽¹⁾	3,811,400
Distributions and Other	(3,502,000		)	⁽⁵⁾	(1,003,700		)	⁽²⁾	(4,505,700		)
Change in Value	3,499,000				1,305,100				4,804,100
June 30, 2017	$	84,984,000			$	63,499,000			$	148,483,000


Six Months Ended June 30, 2017
December 31, 2016	$	73,815,500			$	55,740,200			$	129,555,700
New Capital Raised	11,080,300				4,216,700				15,297,000
Impact of Other Transactions	—				3,811,400			⁽¹⁾	3,811,400
Distributions and Other	(5,368,500		)	⁽⁵⁾	(2,712,900		)	⁽³⁾	(8,081,400		)
Change in Value	5,456,700				2,443,600				7,900,300
June 30, 2017	$	84,984,000			$	63,499,000			$	148,483,000


Trailing Twelve Months Ended June 30, 2017
June 30, 2016	$	75,357,000			$	55,633,500			$	130,990,500
New Capital Raised	14,814,700				9,795,100				24,609,800
Impact of Other Transactions	—				3,811,400			⁽¹⁾	3,811,400
Distributions and Other	(14,387,900		)	⁽⁵⁾	(9,010,300		)	⁽⁴⁾	(23,398,200		)
Change in Value	9,200,200				3,269,300				12,469,500
June 30, 2017	$	84,984,000			$	63,499,000			$	148,483,000

⁽¹⁾ Represents the impact of the PAAMCO Prisma transaction.

⁽²⁾ Includes $432.3 million of redemptions by fund investors.

⁽³⁾ Includes $1,470.1 million of redemptions by fund investors.

⁽⁴⁾ Includes $4,716.4 million of redemptions by fund investors.

⁽⁵⁾ Includes $774.8 million of expired commitments that are no longer eligible to be called.

Page 13



KKR
FEE PAYING ASSETS UNDER MANAGEMENT (UNAUDITED)
(Amounts in thousands)

	Private Markets Segment			Public Markets Segment				Total Reportable Segments
Quarter Ended June 30, 2017
March 31, 2017	$	56,667,600		$	50,463,500			$	107,131,100
New Capital Raised	6,536,500			2,015,300				8,551,800
Impact of Other Transactions	—			(1,600,000		)	⁽¹⁾	(1,600,000		)
Distributions	(1,205,200		)	(1,371,900		)	⁽²⁾	(2,577,100		)
Net Changes in Fee Base of Certain Funds ⁽⁵⁾	(377,300		)	—				(377,300		)
Change in Value	387,300			1,130,400				1,517,700
June 30, 2017	$	62,008,900		$	50,637,300			$	112,646,200


Six Months Ended June 30, 2017
December 31, 2016	$	52,204,800		$	49,268,600			$	101,473,400
New Capital Raised	13,450,100			4,680,100				18,130,200
Impact of Other Transactions	—			(1,600,000		)	⁽¹⁾	(1,600,000		)
Distributions	(1,750,700		)	(3,512,600		)	⁽³⁾	(5,263,300		)
Net Changes in Fee Base of Certain Funds ⁽⁵⁾	(2,418,800		)	—				(2,418,800		)
Change in Value	523,500			1,801,200				2,324,700
June 30, 2017	$	62,008,900		$	50,637,300			$	112,646,200


Trailing Twelve Months Ended June 30, 2017
June 30, 2016	$	46,027,600		$	48,580,500			$	94,608,100
New Capital Raised	26,239,200			11,423,900				37,663,100
Impact of Other Transactions	—			(1,600,000		)	⁽¹⁾	(1,600,000		)
Distributions	(5,796,200		)	(10,052,900		)	⁽⁴⁾	(15,849,100		)
Net Changes in Fee Base of Certain Funds ⁽⁵⁾	(4,965,000		)	—				(4,965,000		)
Change in Value	503,300			2,285,800				2,789,100
June 30, 2017	$	62,008,900		$	50,637,300			$	112,646,200

⁽¹⁾ Represents the impact of the PAAMCO Prisma transaction.

⁽²⁾ Includes $432.3 million of redemptions by fund investors.

⁽³⁾ Includes $1,470.1 million of redemptions by fund investors.

⁽⁴⁾ Includes $4,716.4 million of redemptions by fund investors.

⁽⁵⁾ Represents the impact of certain funds entering their post-investment period.

Page 14



KKR
INVESTMENT VEHICLE SUMMARY ⁽¹⁾ (UNAUDITED)
As of June 30, 2017
(Amounts in millions, except percentages)

	Investment Period		Amount
	Start Date	End Date	Commitment		Uncalled Commitments		Percentage Committed by General Partner	Invested		Realized		Remaining Cost		Remaining Fair Value
Private Markets

Private Equity and Growth Funds
Asian Fund III⁽²⁾	4/2017	4/2023	$	9,000.0	$	9,000.0	5.6%	$	—	$	—	$	—	$	—
Americas Fund XII ⁽²⁾	1/2017	1/2023	13,500.0		13,500.0		7.4%	—		—		—		6.3
Next Generation Technology Growth ⁽²⁾	3/2016	3/2021	658.9		431.3		22.5%	227.6		—		227.6		267.5
European Fund IV ⁽²⁾	12/2014	12/2020	3,486.3		1,734.2		5.7%	1,752.1		—		1,752.1		2,145.9
Asian Fund II ⁽²⁾	4/2013	4/2017	5,825.0		1,012.7		1.3%	5,779.5		1,464.6		4,746.5		6,956.4
North America Fund XI ⁽²⁾	9/2012	1/2017	8,718.4		1,056.0		2.9%	9,005.4		3,776.8		6,599.4		11,073.9
China Growth Fund	11/2010	11/2016	1,010.0		—		1.0%	1,010.0		516.2		714.0		885.9
E2 Investors (Annex Fund)	8/2009	11/2013	195.8		—		4.9%	195.8		195.7		18.1		1.7
European Fund III	3/2008	3/2014	6,135.6		808.3		4.6%	5,327.3		6,936.4		2,058.8		3,174.2
Asian Fund	7/2007	4/2013	3,983.3		—		2.5%	3,945.9		7,657.6		837.9		830.1
2006 Fund	9/2006	9/2012	17,642.2		337.7		2.1%	17,304.5		24,297.5		5,797.7		9,279.6
European Fund II	11/2005	10/2008	5,750.8		—		2.1%	5,750.8		8,455.4		—		70.3
Millennium Fund	12/2002	12/2008	6,000.0		—		2.5%	6,000.0		13,305.4		444.9		599.3
Total Private Equity and Growth			81,906.3		27,880.2			56,298.9		66,605.6		23,197.0		35,291.1

Co-Investment Vehicles and Other ⁽²⁾	Various	Various	7,131.8		2,501.7		Various	4,819.6		1,972.3		3,845.8		5,113.3

Total Private Equity and Growth			89,038.1		30,381.9			61,118.5		68,577.9		27,042.8		40,404.4

Real Assets
Energy Income and Growth Fund ⁽²⁾	9/2013	9/2018	1,974.2		444.4		12.9%	1,559.9		250.8		1,359.0		1,360.5
Natural Resources Fund	Various	Various	887.4		2.8		Various	884.6		113.4		794.9		159.8
Global Energy Opportunities ⁽²⁾	Various	Various	979.2		613.2		Various	405.4		58.8		291.2		311.1
Global Infrastructure Investors ⁽²⁾	9/2011	10/2014	1,040.0		76.1		4.8%	994.9		823.6		587.9		743.8
Global Infrastructure Investors II ⁽²⁾	10/2014	10/2020	3,034.3		1,903.3		4.1%	1,318.1		189.8		1,128.4		1,345.3
Real Estate Partners Americas ⁽²⁾	5/2013	5/2017	1,229.1		404.3		16.3%	948.5		672.8		587.1		668.8
Real Estate Partners Americas II ⁽²⁾	5/2017	(4)	792.7		792.7		18.9%	—		—		—		—
Real Estate Partners Europe ⁽²⁾	9/2015	6/2020	704.1		572.4		9.4%	132.6		4.9		130.7		152.7
Co-Investment Vehicles and Other	Various	Various	1,861.9		425.7		Various	1,436.2		491.5		1,433.9		1,756.7
Real Assets			12,502.9		5,234.9			7,680.2		2,605.6		6,313.1		6,498.7

Unallocated Commitments			176.1		176.1		Various	—		—		—		—

Private Markets Total			101,717.1		35,792.9			68,798.7		71,183.5		33,355.9		46,903.1

Public Markets ⁽³⁾
Special Situations Fund	12/2012	1/2016	2,274.3		72.0		11.6%	2,202.3		620.1		1,914.2		2,145.8
Special Situations Fund II	12/2014	3/2019	3,234.5		2,273.0		9.0%	961.5		—		961.5		927.3
Mezzanine Partners	3/2010	3/2015	1,022.8		108.9		4.4%	913.9		803.3		495.8		459.9
Lending Partners	12/2011	12/2014	460.2		54.9		15.2%	405.3		269.0		329.8		241.9
Lending Partners II	6/2014	6/2017	1,335.9		199.2		3.7%	1,136.7		207.0		1,136.7		1,173.9
Lending Partners III	4/2017	(4)	618.8		618.8		4.2%	—		—		—		1.4
Lending Partners Europe	3/2015	3/2019	847.6		605.3		5.0%	242.3		27.5		242.3		261.7
Other Alternative Credit Vehicles	Various	Various	6,186.6		2,826.6		Various	3,360.0		1,890.8		2,370.5		2,710.8

Public Markets Total			15,980.7		6,758.7			9,222.0		3,817.7		7,450.8		7,922.7

Grand Total			$	117,697.8	$	42,551.6		$	78,020.7	$	75,001.2	$	40,806.7	$	54,825.8

⁽¹⁾ Reflects investment vehicles for which KKR has the ability to earn carried interest and excludes open ended funds, managed accounts, CLOs and certain other investment vehicles where KKR earns an incentive fee.

⁽²⁾ The “Invested” and “Realized” columns include the amounts of any realized investments that restored the unused capital commitments of the fund investors, if any.

⁽³⁾ The "Commitment" and "Uncalled Commitments" columns include income that is eligible to be reinvested if permitted under the terms of the investment vehicle agreements.

⁽⁴⁾ Three years from final closing date.

Page 15

KKR

Notes to Reportable Segments (Unaudited)

The segment key performance measures that follow are used by management in making operating and resource deployment decisions as well as assessing the overall performance of each of KKR’s reportable business segments. The reportable segments for KKR’s business are presented prior to giving effect to the allocation of income (loss) between KKR & Co. L.P. and KKR Holdings L.P. and as such represent the business in total. In addition, KKR’s reportable segments are presented without giving effect to the consolidation of the funds that KKR manages.

KKR discloses the following financial measures in this earnings release that are calculated and presented using methodologies other than in accordance with GAAP. We believe that providing these performance measures on a supplemental basis to our GAAP results is helpful to unitholders in assessing the overall performance of KKR’s businesses. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with GAAP. We caution readers that these non-GAAP financial measures may differ from the calculations of other investment managers, and as a result, may not be comparable to similar measures presented by other investment managers. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included elsewhere within this earnings release.

Adjusted units are used as a measure of the total common equity ownership of KKR that is held by KKR & Co. L.P. (including equity awards issued under the KKR & Co. L.P. 2010 Equity Incentive Plan (the "Equity Incentive Plan"), but excluding preferred units), KKR Holdings and other holders of securities exchangeable into common units of KKR & Co. L.P. and represent the fully diluted common unit count using the if-converted method. We believe this measure is useful to unitholders as it provides an indication of the total common equity ownership of KKR as if all outstanding KKR Holdings units, equity awards issued under the Equity Incentive Plan and other exchangeable securities had been exchanged for common units of KKR & Co. L.P. The Series A and Series B Preferred Units are not exchangeable for common units of KKR & Co. L.P.

Adjusted units eligible for distribution represents the portion of total adjusted units that is eligible to receive a distribution. We believe this measure is useful to unitholders as it provides insight into the calculation of amounts available for distribution on a per unit basis. Adjusted units eligible for distribution is used in the calculation of after-tax distributable earnings per unit.

After-tax distributable earnings is used by management as an operating measure of the earnings excluding mark-to-market gains (losses) of KKR. KKR believes this measure is useful to unitholders as it provides a supplemental measure to assess performance, excluding the impact of mark-to-market gains (losses). After-tax distributable earnings excludes certain realized investment losses to the extent unrealized losses on these investments were recognized prior to the combination with KPE on October 1, 2009. After-tax distributable earnings does not represent and is not used to calculate actual distributions under KKR’s distribution policy.

Assets under management ("AUM") represent the assets managed or advised by KKR from which KKR is entitled to receive fees or a carried interest (either currently or upon deployment of capital), general partner capital, and assets managed or advised by strategic partners in which KKR holds a minority ownership interest. We believe this measure is useful to unitholders as it provides additional insight into KKR's capital raising activities and the overall activity in its investment funds and strategic partnerships. KKR calculates the amount of AUM as of any date as the sum of: (i) the fair value of the investments of KKR's investment funds; (ii) uncalled capital commitments from these funds, including uncalled capital commitments from which KKR is currently not earning management fees or carried interest; (iii) the fair value of investments in KKR's co-investment vehicles; (iv) the par value of outstanding CLOs (excluding CLOs wholly-owned by KKR); (v) KKR's pro-rata portion of the AUM of strategic partners in which KKR holds a minority ownership interest, and (vi) the fair value of other assets managed by KKR. The pro-rata portion of the AUM of strategic partners is calculated based on KKR’s percentage ownership interest in such entities multiplied by such entity’s respective AUM. KKR's definition of AUM is not based on any definition of AUM that may be set forth in the agreements governing the investment funds, vehicles or accounts that it manages or calculated pursuant to any regulatory definitions.

Book value is a measure of the net assets of KKR’s reportable segments and is used by management primarily in assessing the unrealized value of KKR’s investments and other assets, including carried interest. We believe this measure is useful to unitholders as it provides additional insight into the assets and liabilities of KKR excluding the assets and liabilities that are allocated to noncontrolling interest holders and to the holders of the Series A and Series B Preferred Units.

Capital invested is the aggregate amount of capital invested by (i) KKR’s investment funds, (ii) KKR's Principal Activities segment as a co-investment, if any, alongside KKR’s investment funds, and (iii) KKR's Principal Activities segment in connection with a syndication transaction conducted by KKR's Capital Markets segment, if any. Capital invested is used as a measure of investment activity at KKR during a given period. We believe this measure is useful to unitholders as it provides a measure of capital deployment across KKR’s business segments. Capital invested includes investments made using investment financing arrangements like credit facilities, as applicable. Capital invested excludes (i) investments in liquid credit strategies, (ii) capital invested by KKR’s Principal Activities segment that is not a co-investment alongside KKR’s investment funds, and (iii) capital invested by KKR’s Principal Activities segment that is not invested in connection with a syndication transaction by KKR’s Capital Markets segment. Capital syndicated by KKR's Capital Markets segment to third parties other than KKR’s investment funds or Principal Activities segment is not included in capital invested. See also syndicated capital. In the fourth quarter of 2016, the capital invested metric was changed to include capital invested by KKR's Principal Activities segment and all prior periods in this report have been adjusted.

Cash and short-term investments represent cash and liquid short-term investments in high-grade, short-duration cash management strategies used by KKR to generate additional yield on our excess liquidity and is used by management in evaluating KKR’s liquidity position. We believe this measure is useful to unitholders as it provides additional insight into KKR’s available liquidity.

Page 16

Economic net income (loss) (“ENI”) is a measure of profitability for KKR’s reportable segments and is used by management as an alternative measurement of the operating and investment earnings of KKR and its business segments. We believe this measure is useful to unitholders as it provides additional insight into the overall profitability of KKR’s businesses inclusive of carried interest, incentive fees and related carry pool allocations and investment income. ENI is comprised of total segment revenues less total segment expenses and certain economic interests in KKR’s segments held by third parties. For a reconciliation of total segment revenues, total segment expenses and ENI to the most directly comparable amounts recognized under GAAP, see reconciliations at Exhibit C. Pre-tax Economic Net Income (Loss) represents Economic Net Income (Loss) after equity-based compensation. After-tax Economic Net Income (Loss) represents Economic Net Income (Loss) after equity-based compensation, provision for income taxes and preferred distributions.

Fee paying AUM ("FPAUM") represents only the AUM from which KKR receives management fees. We believe this measure is useful to unitholders as it provides additional insight into the capital base upon which KKR earns management fees. FPAUM is the sum of all of the individual fee bases that are used to calculate KKR's and its strategic partners' management fees and differs from AUM in the following respects: (i) assets and commitments from which KKR does not receive a management fee are excluded (e.g., assets and commitments with respect to which it receives only carried interest or is otherwise not currently receiving a management fee) and (ii) certain assets, primarily in its private equity funds, are reflected based on capital commitments and invested capital as opposed to fair value because fees are not impacted by changes in the fair value of underlying investments.

Investments is a term used solely for purposes of financial presentation of a portion of KKR’s balance sheet and includes majority ownership of subsidiaries that operate KKR’s asset management and broker-dealer businesses, including the general partner interests of KKR’s investment funds.

Outstanding adjusted units represents the portion of total adjusted units that would receive assets of KKR if it were to be liquidated as of a particular date. Outstanding adjusted units is used to calculate book value per outstanding adjusted unit, which we believe is useful to unitholders as it provides a measure of net assets of KKR’s reportable segments on a per unit basis.

Realized performance income compensation is the amount allocated to performance income compensation is equal to 40% of the carried interest and incentive fees earned by our investment funds, and, beginning with the quarter ended September 30, 2016, includes 40% of the management fees that would have been subject to a management fee refund for investment funds that have a preferred return.

Syndicated capital is generally the aggregate amount of capital in transactions originated by KKR and its investment funds and carry-yielding co-investment vehicles, which has been distributed to third parties in exchange for a fee. It does not include (i) capital invested in such transactions by KKR investment funds and carry-yielding co-investment vehicles, which is instead reported in capital invested (ii) debt capital that is arranged as part of the acquisition financing of transactions originated by KKR investment funds and (iii) debt capital that is either underwritten or arranged on a best efforts basis. Syndicated capital is used as a measure of investment activity for KKR during a given period, and we believe that this measure is useful to unitholders as it provides additional insight into levels of syndication activity in KKR's Capital Markets segment and across KKR's investment platform.

Uncalled commitments are used as a measure of unfunded capital commitments that KKR’s investment funds and carry-paying co-investment vehicles have received from partners to contribute capital to fund future investments. We believe this measure is useful to unitholders as it provides additional insight into the amount of capital that is available to KKR’s investment funds to make future investments. Uncalled commitments are not reduced for investments completed using fund-level investment financing arrangements.

Page 17



KKR
EXHIBIT A


OTHER FINANCIAL INFORMATION (UNAUDITED)
(Amounts in thousands)

	Quarter Ended						Six Months Ended
	June 30, 2017		March 31, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Fee Related Earnings
Management, Monitoring and Transaction Fees, Net	$	365,160	$	375,522	$	262,106	$	740,682	$	542,021
Less: Cash Compensation and Benefits	135,522		139,435		96,890		274,957		197,789
Less: Occupancy and Related Charges	13,407		14,369		15,659		27,776		31,609
Less: Other Operating expenses	53,069		53,498		49,533		106,567		111,419
Plus: Expenses of Principal Activities Segment	51,195		53,769		37,737		104,964		77,555
Fee Related Earnings ⁽¹⁾	214,357		221,989		137,761		436,346		278,759
Plus: Net Interest and Dividends	20,810		15,173		26,004		35,983		85,580
Plus: Depreciation and Amortization	3,864		4,177		3,959		8,041		7,846
Plus: Core Interest Expense	30,642		29,162		29,388		59,804		58,493
Less: Expenses of Principal Activities Segment	51,195		53,769		37,737		104,964		77,555
Fee and Yield Segment EBITDA ⁽²⁾	218,478		216,732		159,375		435,210		353,123
Plus: Realized Performance Income (Loss), net	155,375		119,823		185,952		275,198		245,281
Plus: Net Realized Gains (Losses)	7,180		79,451		224,699		86,631		200,516
Total Segment EBITDA ⁽²⁾	$	381,033	$	416,006	$	570,026	$	797,039	$	798,920


Core Interest Expense
GAAP Interest Expense	$	198,590	$	186,854	$	181,313	$	385,444	$	352,707
Less: Interest expense related to debt obligations of consolidated investment funds, CLOs and other	151,564		145,145		132,866		296,709		255,716
Segment Interest Expense	47,026		41,709		48,447		88,735		96,991
Less: Interest Expense related to debt obligations from KFN and other	16,384		12,547		19,059		28,931		38,498
Core Interest Expense ⁽³⁾	$	30,642	$	29,162	$	29,388	$	59,804	$	58,493

⁽¹⁾ Fee related earnings (“FRE”) is a measure of the operating earnings of KKR and its business segments before performance income, related performance income compensation and investment income. KKR believes this measure is useful to unitholders as it provides additional insight into the operating profitability of KKR's fee generating management companies and capital markets businesses.

⁽²⁾ Fee and Yield Segment EBITDA and Total Segment EBITDA may be useful in evaluating KKR's ability to service its debt. Fee and Yield Segment EBITDA provides insight into the amount of KKR’s distributable earnings before the impact of interest expense, significant portions of which tend to be more recurring than realized performance income and realized investment income from quarter to quarter. Total Segment EBITDA represents Fee and Yield Segment EBITDA plus the addition of realized performance income and realized investment income.

⁽³⁾ Core interest expense is used by management as an alternative measurement of interest expense incurred by KKR on a segment basis and excludes interest expense related to debt obligations from investment financing arrangements related to certain of KKR’s investment funds, investment vehicles and principal investments and also excludes interest expense incurred by KFN. The financing arrangements excluded from core interest expense are not direct obligations of the general partners of KKR’s private equity funds or its management companies, and in the case of debt obligations of KFN are non-recourse to KKR beyond the assets of KFN. KKR believes this measure is useful to unitholders as it provides an indication of the amount of interest expense borne by KKR excluding interest expense that is allocated to KKR’s investment funds, other noncontrolling interest holders and KFN. Additionally, we believe this measure is useful for analyzing KKR’s ability to service its debt obligations other than the debt obligations of KFN.

Page 18



KKR
EXHIBIT B


KKR'S PORTION OF TOTAL UNCALLED COMMITMENTS TO ITS INVESTMENT FUNDS (UNAUDITED)
(Amounts in thousands)


	Uncalled Commitments
Private Markets
Americas Fund XII	$	1,000,000
Asian Fund III	500,000
Real Estate Partners Americas II	150,000
Next Generation Technology Growth Fund	97,100
European Fund IV	95,600
Global Infrastructure Investors II	78,300
Energy Income and Growth	57,700
Real Estate Partners Europe	54,100
Other Private Markets Vehicles	1,006,200
Total Private Markets Commitments	3,039,000

Public Markets
Special Situations Fund II	203,700
Lending Partners Europe	30,800
Lending Partners III	25,900
Other Public Markets Vehicles	166,500
Total Public Markets Commitments	426,900

Total Uncalled Commitments	$	3,465,900

Page 19



KKR
EXHIBIT C


RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT - BASIC (GAAP BASIS)
TO AFTER TAX ENI PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)

	Quarter Ended
	June 30, 2017		March 31, 2017			June 30, 2016

Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic	$	0.87	$	0.57		$	0.21
Weighted Average Common Units Outstanding - Basic	466,170,025		453,695,846			448,221,538
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders	405,646		259,343			93,890
Plus: Preferred Distributions	8,341		8,341			5,693
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P.	305,280		216,432			73,400
Plus: Non-cash equity-based charges	87,940		111,036			60,657
Plus: Amortization of intangibles, placement fees and other, net	4,524		32,837			9,144
Plus: Income tax (benefit)	18,538		40,542			6,045
Economic Net Income (Loss)	830,269		668,531			248,829
Less: Equity-based compensation associated with the KKR & Co. L.P. 2010 equity incentive plan	44,976		49,943			48,026
Pre-tax Economic Net Income (Loss)	785,293		618,588			200,803
Less: Provision for income tax (benefit)	24,408		60,325			3,898
Less: Preferred Distributions	8,341		8,341			5,693
After-tax Economic Net Income (Loss)	752,544		549,922			191,212
Weighted Average Adjusted Units	847,650,747		849,270,924			840,537,946
After-tax Economic Net Income (Loss) Per Adjusted Unit	$	0.89	$	0.65		$	0.23


	Six Months Ended
	June 30, 2017		June 30, 2016

Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic	$	1.45	$	(0.53	)
Weighted Average Common Units Outstanding - Basic	459,967,395		449,241,840
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders	664,989		(236,049		)
Plus: Preferred Distributions	16,682		5,693
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P.	521,712		(198,175		)
Plus: Non-cash equity-based charges	198,976		124,480
Plus: Amortization of intangibles, placement fees and other, net	37,361		38,026
Plus: Income tax (benefit)	59,080		7,935
Economic Net Income (Loss)	1,498,800		(258,090		)
Less: Equity-based compensation associated with the KKR & Co. L.P. 2010 equity incentive plan	94,919		97,987
Pre-tax Economic Net Income (Loss)	1,403,881		(356,077		)
Less: Provision for income tax (benefit)	84,733		6
Less: Preferred Distributions	16,682		5,693
After-tax Economic Net Income (Loss)	1,302,466		(361,776		)
Weighted Average Adjusted Units	848,456,360		844,254,980
After-tax Economic Net Income (Loss) Per Adjusted Unit	$	1.54	$	(0.43	)

Page 20



KKR
EXHIBIT C (CONTINUED)


RECONCILIATION OF FEES AND OTHER (GAAP BASIS) TO TOTAL SEGMENT REVENUES AND TOTAL DISTRIBUTABLE SEGMENT REVENUES (UNAUDITED)
(Amounts in thousands)
	Quarter Ended
	June 30, 2017			March 31, 2017			June 30, 2016

Fees and Other	$	931,788		$	715,952		$	576,757
Management fees relating to consolidated funds and placement fees	52,300			47,102			44,048
Fee credits relating to consolidated funds	(2,707		)	(939		)	(1,921		)
Net realized and unrealized carried interest - consolidated funds	10,384			11,057			19,186
Total investment income (loss)	335,967			298,660			(46,745		)
Revenue earned by oil & gas producing entities	(17,382		)	(17,273		)	(18,225		)
Reimbursable expenses	(36,076		)	(23,549		)	(18,638		)
Other	(9,136		)	(8,312		)	(10,483		)
Total Segment Revenues	$	1,265,138		$	1,022,698		$	543,979
Unrealized Carried Interest	(296,719		)	(140,626		)	(18,698		)
Net Unrealized Gains (Losses)	(307,977		)	(204,036		)	297,448
Total Distributable Segment Revenues	$	660,442		$	678,036		$	822,729

	Six Months Ended
	June 30, 2017			June 30, 2016

Fees and Other	$	1,647,740		$	739,562
Management fees relating to consolidated funds and placement fees	99,402			82,318
Fee credits relating to consolidated funds	(3,646		)	(2,349		)
Net realized and unrealized carried interest - consolidated funds	21,441			9,625
Total investment income (loss)	634,627			(576,343		)
Revenue earned by oil & gas producing entities	(34,655		)	(31,786		)
Reimbursable expenses	(59,625		)	(34,519		)
Other	(17,448		)	(17,136		)
Total Segment Revenues	$	2,287,836		$	169,372
Unrealized Carried Interest	(437,345		)	205,107
Net Unrealized Gains (Losses)	(512,013		)	862,439
Total Distributable Segment Revenues	$	1,338,478		$	1,236,918

Page 21



KKR
EXHIBIT C (CONTINUED)


RECONCILIATION OF TOTAL EXPENSES (GAAP BASIS) TO TOTAL SEGMENT EXPENSES AND TOTAL DISTRIBUTABLE SEGMENT EXPENSES (UNAUDITED)
(Amounts in thousands)
	Quarter Ended
	June 30, 2017			March 31, 2017			June 30, 2016

Total Expenses	$	629,728		$	540,014		$	423,218
Equity based compensation	(87,940		)	(111,036		)	(60,657		)
Reimbursable expenses and placement fees	(58,860		)	(36,123		)	(30,525		)
Operating expenses relating to consolidated funds, CFEs and other entities	(21,229		)	(13,430		)	(21,281		)
Expenses incurred by oil & gas producing entities	(12,924		)	(11,177		)	(20,392		)
Intangible amortization	(5,062		)	(6,366		)	3,865
Other	(10,024		)	(9,299		)	347
Total Segment Expenses	$	433,689		$	352,583		$	294,575
Unrealized Performance Income Compensation	(119,774		)	(57,214		)	(8,525		)
Total Distributable Segment Expenses	$	313,915		$	295,369		$	286,050

	Six Months Ended
	June 30, 2017			June 30, 2016

Total Expenses	$	1,169,742		$	731,541
Equity based compensation	(198,976		)	(124,480		)
Reimbursable expenses and Placement fees	(94,983		)	(54,632		)
Operating expenses relating to consolidated funds, CFEs and other entities	(34,659		)	(64,952		)
Expenses incurred by oil & gas producing entities	(24,101		)	(38,218		)
Intangible amortization	(11,428		)	(13,528		)
Other	(19,323		)	(9,511		)
Total Segment Expenses	$	786,272		$	426,220
Unrealized Performance Income Compensation	(176,988		)	78,117
Total Distributable Segment Expenses	$	609,284		$	504,337

Page 22



KKR
EXHIBIT C (CONTINUED)


RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. COMMON UNITHOLDERS (GAAP BASIS)
TO ECONOMIC NET INCOME (LOSS), FEE RELATED EARNINGS, FEE AND YIELD SEGMENT EBITDA, AFTER TAX DISTRIBUTABLE EARNINGS AND TOTAL SEGMENT EBITDA (UNAUDITED)
(Amounts in thousands)

	Quarter Ended
	June 30, 2017		March 31, 2017			June 30, 2016
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders	$	405,646	$	259,343		$	93,890
Plus: Preferred Distributions	8,341		8,341			5,693
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P.	305,280		216,432			73,400
Plus: Non-cash equity-based charges	87,940		111,036			60,657
Plus: Amortization of intangibles, placement fees and other, net	4,524		32,837			9,144
Plus: Income tax (benefit)	18,538		40,542			6,045
Economic Net Income (Loss)	830,269		668,531			248,829
Plus: Income attributable to segment noncontrolling interests	1,180		1,584			575
Less: Total investment income (loss)	335,967		298,660			(46,745		)
Less: Net performance income (loss)	332,320		203,235			196,125
Plus: Expenses of Principal Activities Segment	51,195		53,769			37,737
Fee Related Earnings	214,357		221,989			137,761
Plus: Net interest and dividends	20,810		15,173			26,004
Plus: Depreciation and amortization	3,864		4,177			3,959
Plus: Core interest expense	30,642		29,162			29,388
Less: Expenses of Principal Activities Segment	51,195		53,769			37,737
Fee and Yield Segment EBITDA	218,478		216,732			159,375
Less: Depreciation and amortization	3,864		4,177			3,959
Less: Core interest expense	30,642		29,162			29,388
Plus: Realized performance income (loss), net	155,375		119,823			185,952
Plus: Net realized gains (losses)	7,180		79,451			224,699
Less: Income taxes paid	15,084		26,275			22,819
Less: Preferred Distributions	8,341		8,341			5,693
Less: Income attributable to segment noncontrolling interests	1,180		1,584			575
After-tax Distributable Earnings	321,922		346,467			507,592
Plus: Depreciation and amortization	3,864		4,177			3,959
Plus: Core interest expense	30,642		29,162			29,388
Plus: Income taxes paid	15,084		26,275			22,819
Plus: Preferred Distributions	8,341		8,341			5,693
Plus: Income attributable to segment noncontrolling interests	1,180		1,584			575
Total Segment EBITDA	$	381,033	$	416,006		$	570,026

	Six Months Ended
	June 30, 2017		June 30, 2016
Net Income (Loss) Attributable to KKR & Co. L.P. Common Unitholders	$	664,989	$	(236,049	)
Plus: Preferred Distributions	16,682		5,693
Plus: Net income (loss) attributable to noncontrolling interests held by KKR Holdings L.P.	521,712		(198,175		)
Plus: Non-cash equity-based charges	198,976		124,480
Plus: Amortization of intangibles, placement fees and other, net	37,361		38,026
Plus: Income tax (benefit)	59,080		7,935
Economic Net Income (Loss)	1,498,800		(258,090		)
Plus: Income attributable to segment noncontrolling interests	2,764		1,242
Less: Total investment income (loss)	634,627		(576,343		)
Less: Net performance income (loss)	535,555		118,291
Plus: Expenses of Principal Activities Segment	104,964		77,555
Fee Related Earnings	436,346		278,759
Plus: Net interest and dividends	35,983		85,580
Plus: Depreciation and amortization	8,041		7,846
Plus: Core interest expense	59,804		58,493
Less: Expenses of Principal Activities Segment	104,964		77,555
Fee and Yield Segment EBITDA	435,210		353,123
Less: Depreciation and amortization	8,041		7,846
Less: Core interest expense	59,804		58,493
Plus: Realized performance income (loss), net	275,198		245,281
Plus: Net realized gains (losses)	86,631		200,516
Less: Income taxes paid	41,359		49,322
Less: Preferred Distributions	16,682		5,693
Less: Income attributable to segment noncontrolling interests	2,764		1,242
After-tax Distributable Earnings	668,389		676,324
Plus: Depreciation and amortization	8,041		7,846
Plus: Core interest expense	59,804		58,493
Plus: Income taxes paid	41,359		49,322
Plus: Preferred Distributions	16,682		5,693
Plus: Income attributable to segment noncontrolling interests	2,764		1,242
Total Segment EBITDA	$	797,039	$	798,920

Page 23



KKR
EXHIBIT C (CONTINUED)


RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (GAAP BASIS)
TO TOTAL REPORTABLE SEGMENTS BALANCE SHEET (UNAUDITED)
June 30, 2017
(Amounts in thousands)

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (GAAP BASIS)			1		2		3		4		5		TOTAL REPORTABLE SEGMENTS BALANCE SHEET

Assets
Cash and Cash Equivalents	$	2,131,687	—		—		942,316		—		—		$	3,074,003	Cash and Short-term Investments
Investments	36,267,767		(25,259,845	)	(1,152,015	)	(1,498,310	)	—		—		8,357,597		Investments
			—		—		1,498,310		—		—		1,498,310		Unrealized Carry
Other Assets	4,468,627		(1,152,717	)	—		(1,103,541	)	—		(302,835	)	1,909,534		Other Assets
			—		—		161,225		—		—		161,225		Corporate Real Estate
Total Assets	$	42,868,081	(26,412,562	)	(1,152,015	)	—		—		(302,835	)	$	15,000,669

Liabilities and Equity
Debt Obligations	19,425,253		(16,785,486	)	—		(639,767	)	—		—		2,000,000		Debt Obligations - KKR (ex-KFN)
			—		—		639,767		—		—		639,767		Debt Obligations - KFN
			—		—		373,750		—		—		373,750		Preferred Shares - KFN
Other Liabilities	3,900,469		(2,084,483	)	(1,152,015	)	—		—		(172,709	)	491,262		Other Liabilities
Total Liabilities	23,325,722		(18,869,969	)	(1,152,015	)	373,750		—		(172,709	)	3,504,779

Redeemable Noncontrolling Interests	512,481		(512,481	)	—		—		—		—

Equity
Series A Preferred Units	332,988		—		—		(332,988	)	—		—
Series B Preferred Units	149,566		—		—		(149,566	)	—		—
KKR & Co. L.P. Capital - Common Unitholders	6,212,556		137,831		—		(17,446	)	4,770,678		(130,126	)	10,973,493		Book Value
Noncontrolling Interests	12,334,768		(7,167,943	)	—		(373,750	)	(4,770,678	)	—		22,397		Noncontrolling Interests
			—		—		500,000		—		—		500,000		Preferred Units
Total Liabilities and Equity	$	42,868,081	(26,412,562	)	(1,152,015	)	—		—		(302,835	)	$	15,000,669



1	IMPACT OF CONSOLIDATION OF INVESTMENT VEHICLES AND OTHER ENTITIES
2	CARRY POOL RECLASSIFICATION
3	OTHER RECLASSIFICATIONS
4	NONCONTROLLING INTERESTS HELD BY KKR HOLDINGS L.P. AND OTHER
5	EQUITY IMPACT OF KKR MANAGEMENT HOLDINGS CORP.

Page 24



KKR
EXHIBIT C (CONTINUED)


RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (GAAP BASIS)
TO TOTAL REPORTABLE SEGMENTS BALANCE SHEET (UNAUDITED)
DECEMBER 31, 2016
(Amounts in thousands)

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (GAAP BASIS)			1		2		3		4		5		TOTAL REPORTABLE SEGMENTS BALANCE SHEET

Assets
Cash and Cash Equivalents	$	2,508,902	—		—		878,771		—		—		$	3,387,673	Cash and Short-term Investments
Investments	31,409,765		(22,249,206	)	(987,994	)	(1,213,692	)	—		—		6,958,873		Investments
			—		—		1,213,692		—		—		1,213,692		Unrealized Carry
Other Assets	5,084,230		(2,118,364	)	—		(1,039,996	)	—		(314,192	)	1,611,678		Other Assets
			—		—		161,225		—		—		161,225		Corporate Real Estate
Total Assets	$	39,002,897	(24,367,570	)	(987,994	)	—		—		(314,192	)	$	13,333,141

Liabilities and Equity
Debt Obligations	18,544,075		(16,145,515	)	—		(398,560	)	—		—		2,000,000		Debt Obligations - KKR (ex-KFN)
			—		—		398,560		—		—		398,560		Debt Obligations - KFN
			—		—		373,750		—		—		373,750		Preferred Shares - KFN
Other Liabilities	3,340,739		(1,945,039	)	(987,994	)	—		—		(163,030	)	244,676		Other Liabilities
Total Liabilities	21,884,814		(18,090,554	)	(987,994	)	373,750		—		(163,030	)	3,016,986

Redeemable Noncontrolling Interests	632,348		(632,348	)	—		—		—		—

Equity
Series A Preferred Units	332,988		—		—		(332,988	)	—		—
Series B Preferred Units	149,566		—		—		(149,566	)	—		—
KKR & Co. L.P. Capital - Common Unitholders	5,457,279		118,635		—		(17,446	)	4,389,285		(151,162	)	9,796,591		Book Value
Noncontrolling Interests	10,545,902		(5,763,303	)	—		(373,750	)	(4,389,285	)	—		19,564		Noncontrolling Interests
			—		—		500,000		—		—		500,000		Preferred Units
Total Liabilities and Equity	$	39,002,897	(24,367,570	)	(987,994	)	—		—		(314,192	)	$	13,333,141



1	IMPACT OF CONSOLIDATION OF INVESTMENT VEHICLES AND OTHER ENTITIES
2	CARRY POOL RECLASSIFICATION
3	OTHER RECLASSIFICATIONS
4	NONCONTROLLING INTERESTS HELD BY KKR HOLDINGS L.P. AND OTHER
5	EQUITY IMPACT OF KKR MANAGEMENT HOLDINGS CORP.

Page 25



KKR
EXHIBIT D


RECONCILIATION OF WEIGHTED AVERAGE GAAP COMMON UNITS OUTSTANDING (UNAUDITED)

The following table provides a reconciliation of KKR's Weighted Average GAAP Common Units Outstanding to Weighted Average Adjusted Units:

	Quarter Ended
	June 30, 2017		March 31, 2017			June 30, 2016
Weighted Average GAAP Common Units Outstanding - Basic	466,170,025		453,695,846			448,221,538
Adjustments:
Weighted Average Unvested Common Units and Other Securities ⁽¹⁾	35,007,398		42,988,494			33,588,074
Weighted Average GAAP Common Units Outstanding - Diluted	501,177,423		496,684,340			481,809,612
Adjustments:
Weighted Average KKR Holdings Units ⁽²⁾	346,473,324		352,586,584			358,728,334
Weighted Average Unvested Common Units and Other Securities ⁽¹⁾	—		—			—
Weighted Average Adjusted Units	847,650,747		849,270,924			840,537,946


	Six Months Ended
	June 30, 2017		June 30, 2016
Weighted Average GAAP Common Units Outstanding - Basic	459,967,395		449,241,840
Adjustments:
Weighted Average Unvested Common Units and Other Securities ⁽¹⁾	38,975,899		—		⁽³⁾
Weighted Average GAAP Common Units Outstanding - Diluted	498,943,294		449,241,840
Adjustments:
Weighted Average KKR Holdings Units ⁽²⁾	349,513,066		359,522,981
Weighted Average Unvested Common Units and Other Securities ⁽¹⁾	—		35,490,159		⁽³⁾
Weighted Average Adjusted Units	848,456,360		844,254,980



RECONCILIATION OF GAAP COMMON UNITS OUTSTANDING (UNAUDITED)

The following table provides a reconciliation of KKR's GAAP Common Units Outstanding to Adjusted Units, Adjusted Units Eligible for Distribution and Outstanding Adjusted Units:

	As of
	June 30, 2017		December 31, 2016
GAAP Common Units Outstanding - Basic	469,968,183		452,380,335
Unvested Common Units and Other Securities⁽¹⁾	34,490,657		42,119,756
GAAP Common Units Outstanding - Diluted	504,458,840		494,500,091
Adjustments:
KKR Holdings Units ⁽²⁾	342,993,993		353,757,398
Adjusted Units	847,452,833		848,257,489
Adjustments:
Unvested Common Units	(30,487,944	)	(37,519,436	)
Adjusted Units Eligible for Distribution	816,964,889		810,738,053
Adjustments:
Vested Other Securities	(4,002,713	)	(4,600,320	)
Outstanding Adjusted Units	812,962,176		806,137,733

⁽¹⁾ Represents unvested equity awards granted under the Equity Incentive Plan and other securities that are exchangeable into KKR & Co. L.P common units. The issuance of common units of KKR & Co. L.P. pursuant to such equity awards or other securities dilutes KKR common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR business.

⁽²⁾ Common units that may be issued by KKR & Co. L.P. upon exchange of units in KKR Holdings L.P. for KKR common units.

⁽³⁾ Unvested common units and other securities are excluded from the calculation of diluted earnings per common unit on a GAAP basis because inclusion of such unvested common units and other securities would be anti-dilutive having the effect of decreasing the loss per common unit.

Page 26

KKR & Co. Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 26, 2017

Attached files

KKR & Co. Inc. Reports